New Delhi. The 25 percent additional tariff imposed on India for buying Russian oil has been removed. US President Donald Trump has issued orders under the interim trade agreement. In this, India has been given immediate relief. However, experts say that more important than this relief is the strict monitoring mechanism that comes with it. A Jio strategist has posted regarding this. In his post he said that this order entrusts the US Commerce Secretary with the task of tracking India’s oil source. This creates a clear trigger for action. Trump’s orders are conditional. This means that if the condition is violated, a 25 percent tariff may be refunded.
The real sting in Trump’s executive order on Russian oil lies in its monitoring mandate, the expert wrote. It formally assigns the commerce minister the task of monitoring Indian oil imports which creates clear triggers. The 25 per cent additional (punitive) tariff may be reinstated if it is found that India has resumed importing Russian oil, directly or indirectly.
Experts cautioned that the inclusion of the term indirectly increases the scope of enforcement substantially. Replacing discounted Russian Ural crude with market-priced US oil could increase India’s oil import bill by up to $4 billion annually, experts said. This will be more expensive due to the longer transportation distance. He said, Washington’s intention is clear…to link India’s energy security with the more expensive and geographically distant supplier America.
America has said that India has expressed commitment to stop importing Russian oil directly or indirectly. With this move, Washington has removed the additional 25 percent tariff imposed on Indian goods last August. According to the executive order issued by US President Donald Trump, India has also committed to a framework with the US to expand defense cooperation over the next 10 years. However, Trump has made it clear that the tariff rollback is conditional.
The strategist said that in the executive order, America will keep a close watch on India’s oil sources. He said, in coordination with the Minister of Commerce, the Minister of State, the Minister of Finance, and any other senior official that the Commerce Minister deems appropriate, it will monitor whether India resumes imports of Russian Federation oil, directly or indirectly, as defined in Section 7 of Executive Order 14329.
He said a determination from US officials could trigger further action. If the Secretary of Commerce finds that India has, directly or indirectly, resumed imports of Russian Federation oil, the Secretary of State, in consultation with the Secretary of Finance, the Minister of Commerce, the Secretary of the Interior, the U.S. Trade Representative, the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, and the Assistant and Senior Advisor to the President for Trade and Manufacturing, will recommend whether and to what extent I should take additional action against India.
